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https://www.aeaweb.org/research/property-rights-autocracies-dynamics

Modern autocracies use legal frameworks to redistribute wealth to elites, appearing legitimate while secretly expropriating assets. This leads to inefficiency and lower growth, according to a new study.

Autocracy
Property Rights
Economic Inequality
Political Economy
Legal Systems
Economic Growth
Russia
China

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AI Headline
The economics of autocratic legalism
Simplified Title
Autocrats Redistribute Wealth Through Legalism
AI Excerpt
Modern autocracies use legal frameworks to redistribute wealth to elites, appearing legitimate while secretly expropriating assets. This leads to inefficiency and lower growth, according to a new study.
Subject Tags
Autocracy Property Rights Economic Inequality Political Economy Legal Systems Economic Growth Russia China
Context Type
Research
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1.000
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Source Information

Complete details about this source submission.

Domain
aeaweb.org
Site Name
American Economic Association
Section
Economics
Publisher
American Economic Association
Author
Tyler Smith
Published Date
September 20, 2023 at 12:00 AM
Overall Status
Pending
Submitted By
Donato V. Pompo
Submission Date
August 31, 2025 at 2:50 PM
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                "text": "But modern autocracies have become more adept at subtler forms of oppression and expropriation.",
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                "text": "This \u201cautocratic legalism\u201d\u2014hiding authoritarian designs in legitimate legal frameworks\u2014gives the appearance of providing robust property rights, while in reality redistribution is dictated by powerful political actors behind the scenes.",
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                "text": "In their model, an autocrat controls property rights over a country\u2019s assets, representing the interests of a dominant in-group against the general population.",
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                "text": "Instead, the autocrat has to use a more indirect method of immiserating the out-group.",
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                "text": "While the in-group is able to use the legal process to appropriate the out-group's assets, the authors\u2019 model predicts that the dictator will turn to public assets as a backdoor for redistribution.",
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                "text": "When autocrats come to power, they have an incentive to nationalize assets from the incumbent elite, which history shows can be initially quite popular.",
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                "text": "But through legal adjudication, those assets are slowly privatized by the new elite.",
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                "text": "The result is an increasing concentration of private wealth and a declining share of public wealth over time\u2014a trend consistent with recent data from Russia and China.",
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                "text": "The path of redistribution turns out to be highly inefficient,\u201d Lagunoff said. \u201cIt leads to a misallocation of assets, lower growth, and inefficient consumption smoothing.",
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                "text": "The authors point out that a civil society powerful enough to push for the rule of law and the enforcement of property rights could help mitigate such inefficiencies.",
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Updated At
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Parsed Content
The economics of autocratic legalism

September 20, 2023

Tyler Smith


How do modern autocracies immiserate their populace to satisfy the elite?

When historians write about despotic governments of the past, revolutions and violent crackdowns take center stage. But modern autocracies have become more adept at subtler forms of oppression and expropriation.

The ability of autocrats to maintain the appearance of working within the framework of a liberal democracy might help to explain recent patterns of wealth and property redistribution in countries like Russia and China, according to a paper in the American Economic Journal: Microeconomics. The authors, Dan Cao and Roger Lagunoff, study the microeconomic foundations of property dynamics in modern autocracies and their implications for economic growth.

Modern autocracies use information technologies and social media to monitor their citizens and manipulate public perception more effectively than their predecessors. In particular, they...

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